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New investments in realty sector fall over 75% in Tamil Nadu: Report

The new investments in realty sector attracted by Tamil Nadu plummeted from over Rs 13,600 crore to just over Rs 3,300 crore during the period ranging between 2011-12 and 2012-13, thereby registering a significant year-on-year decline of over 75 per cent, industry body Assocham said today.

“However, Tamil Nadu has ranked third with a share of about eight per cent in the total value of new investments attracted by the real estate sector across India during the last fiscal,” according to a real estate sector specific analysis carried out by The Associated Chambers of Commerce and Industry of India (Assocham).

“States across India attracted new investments worth over Rs 42,000 crore in the real estate sector during 2012-13 which declined from over Rs 92,600 crore in 2011-12,” said D S Rawat, national secretary general of Assocham while releasing the chamber’s analysis.

While most of the states have seen a decline in attracting new investments in the realty sector, Gujarat has seen a surge of over 700 per cent as the state has attracted investments worth over Rs 17,000 crore as of March 2013 from just over Rs 2,000 crore a year ago.

“Kerala is another state which has seen massive growth of over 550 per cent in attracting new investments in real estate followed by Uttarakhand (400 per cent) and Rajasthan (175 per cent),” said Mr Rawat. “While almost rest of the states have seen a drop of over 50 per cent in new investments in the realty sector during the aforesaid period.”

While, Gujarat has maximum share of about 41 per cent in the new investments attracted by the real estate sector across India, the states of Maharashtra (over 17 per cent), Karnataka (10 per cent), Tamil Nadu (eight per cent) and Uttar Pradesh (over six per cent) are amid top five states with maximum share in this regard as per the Assocham analysis.

Besides, with a share of about 15 per cent, Gujarat is second only to Maharashtra which has maximum share of about 20 per cent in the total outstanding investments worth over Rs 14 lakh crore attracted by the real estate sector across India as of March 2013.

“Realty sector accounts for over 11 per cent share in total outstanding investments worth over Rs 122 lakh crore attracted by different sectors from various public and private sources across India,” said Rawat.

Maharashtra, Gujarat, Haryana, Karnataka and Andhra Pradesh are the top five states with highest share for attracting maximum outstanding investments in the real estate segment across India. Besides, these five states account for over 70 per cent of the total outstanding investments attracted by realty sector across India.

Tamil Nadu has attracted outstanding investments worth over Rs 88,600 crore in the real estate sector as of March 2013 and accounts for over six per cent share in total outstanding investments attracted by real estate sector across India.

Outstanding investments in real estate have risen by over 25 per cent throughout the country during the five year period of 2008-09 and 2012-13 while it grew by about 22 per cent in Tamil Nadu.

“The real estate sector in India has been plagued with serious problems of late like falling sales, rising construction costs, dampened market sentiment overall, sluggish economic growth, high interest rates, high inflation and poor industrial production ( IIP) due to which leading players in the sector had to sell of their land to reduce debt, private equity players have trimmed their exposure in realty sector and general slowdown in various industries has hit commercial real estate,” said Rawat.

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